Hornby scraps dividend as recession bites

5th Jun 2009 07:52

Toy racing car and train set maker Hornby scrapped its final dividend as a combination of the weak pound and recession sent profits tumbling."This has been a challenging year for Hornby. As a result of the weak pound and continuing supply chain issues, our profits and margins have come under pressure. As a result, the board thinks it prudent not to pay a final dividend. This is a decision that will enable us to strengthen an already healthy balance sheet," it said. The group, which also unveiled a deal today with the Brawn Formula One racing team, saw pre-tax profits fall from £9m to £6.1m in the year to March. Sales rose from £55.7m to £61.6m.After a flat sales performance in the first half of the financial year, in which sales fell by 1% compared to the previous corresponding period, sales in the second half increased by 20% against a much stronger comparative period, Hornby said.Airfix and Humbrol sales continued to show good growth and the bulk of Corgi sales were made in the second half. Supply chain issues during the year related to our largest supplier once again constrained sales of model railways, mainly in Continental Europe.' The diversity of our products across the Group continues to impress and attract customers. We are a broadly based hobby business and the continued demand for our products proves our resilience in times of recession.